Iran Develops Experimental Local Cryptocurrency After Central Bank Bans Cryptos

  • Iran has recently revealed it developed an experimental local cryptocurrency, at a time in which the government's central bank moved to ban cryptos.
  • The development comes at a time in which its fiat currency plunges to an all-tme low.

Merely days after Iran’s central bank moved to ban domestic banks and credit institutions from trading cryptocurrencies like bitcoin, a government minister revealed the country developed its own experimental local cryptocurrency, according to a report published by Reuters.

While Iran had in the past been fond of cryptocurrencies like bitcoin, at a time in which it was dealing with harsh sanctions that saw its financial institutions be cut off from major international payment networks like Visa, Mastercard, and PayPal, in February its approach took a U-turn and Iran’s central bank rejected bitcoin, while starting to work on its own cryptocurrency.

Iran reportedly rejected bitcoin over money laundering concerns. As an alternative, a centralized, regulated cryptocurrency was announced. Information and Communications Technology Minister Mohammad Javad Azari-Jahromi has now revealed the cryptocurrency wasn’t affected by the ban, and that an “experimental model” is ready.

He said:

“The central bank’s (ban) does not mean the prohibition or restriction of the use of the digital currency in domestic development… Last week, at a joint meeting to review the progress of the (local cryptocurrency) project, it was announced that the experimental model was ready.”

Mohammad Javad Azari-Jahromi

Per Reuters, Azari-Jahromi is the country’s youngest minister and is known as an innovator. Through a tweet, he reportedly revealed his ministry’s Post Bank had been working with local experts on the experimental model of Iran’s cryptocurrency, which is set to be presented to the country’s banks for review.

Iran has recently banned money changing outside of banks, at a time in which its fiat currency, the Rial (IRR), plunges to an all-time low. The currency’s drop is related to the possible return of sanctions, if the United States back down from a multilateral nuclear deal. On May 12, US President Donald Trump will decide whether the country will once again face harsh sanctions.

While in February we reported that the Iranian Rial made up for less than 0.01 percent of bitcoin’s trading volume, as the equivalent of about $40,000 had been traded in the last 24-hour period on local peer-to-peer exchange LocalBitcoins. At press time, the equivalent of about $25,000 have been traded against the Rial.